The Benefit of Hindsight

New rules allow ETFs to market back-tested data, but the practice is mired in murky practices that don't benefit most investors.

Hindsight is 20/20. So it's easy to see why investors might be kicking themselves for not investing in the PowerShares S&P 500 Low Volatility Portfolio (ticker: SPLV) in 2008. Over the past five years, the index this exchange-traded fund tracks has returned 11.7% a year -- considerably better than the S&P 500's 8.5%. There's just one hitch: That index didn't exist five years ago, and those returns are mostly hypothetical.

Those "historical" returns for the Low Volatility index, which launched in April...